Railway legislation passes, more squabbling down the track

The Senate has given final approval to legislation to require the freight railways to offer service agreements to their customers, but squabbling over details of the law is expected to continue.

To shippers, the law didn’t go far enough while the railways warned it would interfere with normal commercial relationships.

Transport Canada will now have to draft regulations to enact the provisions of the law. Given the divide between carriers and shippers, there will be plenty of disagreement over the details as they are posted in the Canada Gazette for public comment before becoming the law.

The rules will give the Canadian Transportation Agency a large role in adjudicating service disputes.

Claude Mongeau, president and CEO of CN, said the bill is a disappointment “because it is not consistent with a sound public policy agenda that encourages increased productivity and innovation in Canada.

“There is always room for continuous improvement, but we operate in a well-functioning market where there are no systemic service issues,” Mongeau added. “This enviable situation is the result of 25 years of successful public policy that progressively deregulated railways and encouraged greater reliance on normal commercial market forces.”

Spearheaded by the Canadian Industrial Transportation Association, shipper groups had prodded the Harper government create a balance in the marketplace between shippers and the railways. After five years of studies and debate, the legislation is a letdown, says CITA president Bob Ballantyne, who also serves as chairman of the Coalition of Rail Shippers.

“The way it is worded now, it has some openings in it that would certainly allow the railways to use various legal processes to either delay or thwart the intent of the bill,” he told Senate hearings on the bill.

Shippers also wanted the right to demand that the railways compensate them when they fail to meet delivery commitments. The railways impose a number of service charges on the carriers if they don’t load and unload cars fast enough or fall short on other obligations.

The government used its majority in Parliament to push the legislation through without any amendments.

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